107.: ricardo to say1[Reply to 106.—Answered by 117] - David Ricardo, The Works and Correspondence of David Ricardo, Vol. 6 Letters 1810-1815 
The Works and Correspondence of David Ricardo, ed. Piero Sraffa with the Collaboration of M.H. Dobb (Indianapolis: Liberty Fund, 2005). Vol. 6 Letters 1810-1815.
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First published by Cambridge University Press in 1951. Copyright 1951, 1952, 1955, 1973 by the Royal Economic Society. This edition of The Works and Correspondence of David Ricardo is published by Liberty Fund, Inc., under license from the Royal Economic Society.
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ricardo to say
[Reply to 106.—Answered by 117]
Gatcomb Park, Minchinhampton Gloucestershire 18th. Augt. 1815
I received with very great pleasure the book and letter which Mr. Basevi delivered me from you. I was exceedingly happy to hear that you were well, as I had very often thought of you, during the almost incredible occurrences which have in the last few months taken place in France, with apprehensions that they might interfere with your ease and comfort. I regret, as all the friends of peace must, the renewal of those military outrages which had so long desolated Europe, and to which I hoped there had been a termination for many years. May your country be soon relieved from the terrible scourge under which it is now suffering, and may the smiling days of peace, tranquility and good government compensate you for the evils which you have endured.
Surrounded as I am by a large family I shall find some difficulty in arranging a visit to Paris,—I hope however to accomplish it next spring. I shall be glad to find you actively employed in some public situation, devoting your energy and talents in the service of a free government and in the establishment of those sound principles of Political Economy which your writings have already so ably developed.
I have read with much satisfaction your Catechisme D’Economie Politique. I think it excellent. All the grand principles are perspicuously and forcibly laid down, and I am convinced that not only the student but the initiated will find considerable advantage from consulting it.
You have I perceive a little modified the definition of the word value as far as it is dependent on utility, but with great diffidence, I observe, that I do not think you have mastered the difficulties which attach to the explanation of that difficult word. Utility is certainly the foundation of value, but the degree of utility can never be the measure by which to estimate value. A commodity difficult of production will always be more valuable than one which is easily produced although all men should agree that the latter is more useful than the former. A commodity must be useful to have value but the difficulty of its production is the true measure of its value. For this reason Iron though more useful is of less value than gold.
Riches are valuable only as they can procure us enjoyments. That man is most rich, and has most valuables, who can procure in exchange for his commodities, not those things which he himself or the world generally consider as most desireable, because they may possibly be procured at little cost, but those things which are of difficult production, which is always the foundation of great value. It appears to me therefore incorrect to say as you do page 95 that that man is superlatively rich, although he has few valuables, who can procure easily or for nothing those things which he wishes to consume. He may only wish to consume bread and water and may be able to procure no more. He cannot be so rich as his neighbour who has abundance of valuables which he can exchange for all the luxuries of life, which it [is] his desire to consume. Riches are measured by the quantity of valuables which a man possesses, not by the moderation of his wants.
You will excuse me for offering one more observation. In page 21 you say that a manufacturer to ascertain whether the value of his capital is increased must make an inventory of all that he possesses valuing each commodity at its current price. Such a process would inform him only whether the money value of his capital had increased:—it might be satisfactory to him, but it is not the mode by which a political economist should judge of the increased value of capital. During the depreciation of our currency (Bank notes) many men thought the value of their capital had increased, when possibly it had diminished, merely because it was worth a greater number of pounds sterling. Money, whether metallic, or paper money, may always fall in value, and cannot therefore correctly measure the value of other commodities for six months together. An increase of capital is to be ascertained only by its power of employing more industry and of adding to the produce of the land and labour of the country. The principle I know you fully recognize but I question whether you have not lost sight of it in the above passage.
My pleasure in reading and studying works on political economy has suffered no abatement and I would readily devote my time to the discussion of such points as appear to me to want elucidation if my want of talent for composition did not prevent me. I ventured however notwithstanding this defect to publish the small pamphlet which I sent you in the spring. I should have been glad to have had your opinion of the particular doctrines which I hold respecting rent and profit in opposition to Mr. Malthus. Possibly you may think as I understand from Mr. Mill many able persons think here that I have not been sufficiently diffuse, and therefore do not understand me. Mr. Mill wishes me to write it over again more at large. I fear the undertaking exceeds my powers.
I thank you much for your kind expressions with regard to my successful operations in business, and with best wishes for your happiness and prosperity
I am My dear Sir very respectfully Yours